Don’t fall into the faux-progress trap: Australia still loves coal | RenewEconomy

Don’t fall into the faux-progress trap: Australia still loves coal

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The Hazelwood coal-fired power station was demolished just days after the release of Angus Taylor’s tech roadmap paper, and too few people noticed the significance. 

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Image: Still from Engie livestream video
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Every single time Australia’s government discards an idea they never should have adopted in the first place, accolades come pouring in.

‘They’ve taken a step forward’, was the cry, when Australia went from planning to use an accounting trick to reduce its 2030 Paris ambitions by half, to simply saying they’ll use them if they need to (this is like saying a pass mark on a test is 50%, unless you get 25% or above, in which case it’s now 25% – it defeats the point of the pass mark to add in the option of failure). Despite this blatant ruse, the change in wording was seen as progress. 

Whatever instinct drives this repeating pattern – where an egregious position is pared back by 1% to be met with thunderous applause – it hasn’t been slowed down by the rise of a global health crisis. It’s gotten worse. 

Last week, a flurry of energy news came in quick succession. A secretive review led by fossil fuel executives delivered its findings (the ‘King Review’) on the government’s signature ‘climate solutions fund’, urging the creation of, potentially, even more loopholes, alongside altering Australia’s clean energy funding agencies to invest in fossil fuels. Alongside that, a discussion paper about the government’s ‘technology roadmap’, which will purportedly guide investments in technological advance and is touted as a replacement for a net zero by 2050 plan. 

For some time, elements of the Morrison government have been posturing for the construction of a new coal-fired power station. The absence of suggestions for a new coal-fired power station in either the King review or the discussion paper was seen as a transformational change. “So we have a significant, if relatively quietly made, change in rhetoric on coal”, wrote the ABC’s Laura Tingle. 

I don’t think this is true. Both the King review and the technological roadmap place deep and heavy faith on ‘carbon capture and storage’ technologies, long-promised but likely to never, ever deliver. But even putting that aside, these conclusions badly ignore the location of the main game for Australia’s burning of coal: the forecasted demise of its rapidly aging power stations. 

The Liddell factor 

On Monday, ago, the Hazelwood coal-fired power station – suddenly shut down in 2017 by its French operator Engie – was demolished. The stacks fell days after Taylor’s tech roadmap paper, and too few people noticed the significance. 

What we know is that Hazelwood’s fate is inevitable for every single one of Australia’s coal-fired power stations. Each has a date at which it simply gets too old and ought to be shut down. As the old Renewable Energy Target scheme shudders to a halt, and new renewables are the default cheapest option for Australia’s National Electricity Market, it will be the shutdown of coal, not the creation of new wind and solar subsidies, that drives emissions reductions. 

The Australian Energy Market Operator’s (AEMO) Integrated System Plan (ISP) maps out the times at which this coal fleet will age out and shut down: 

Chart 1 – Shutdowns ISP

Highlighted red on that chart is the first power station due to shut down: Liddell, owned by AGL energy (a company that was just removed from Norway’s Sovereign Wealth Fund investments for its heavy investments into coal). It has been the subject of the Coalition’s ire for many years now, with many calling for its lifespan to be extended, the latest being, reportedly, Energy Minister Angus Taylor in early March. The calls to extend the life of the power stations by three years can be rendered on AEMO’s timeline of coal retirements:

That lifetime extension for this coal-fired power station is three more years of high emissions in NSW’s already highly polluting grid, along with associated impacts of air pollution on human health. It is also gigawatt hours of fossil fuels that crowd out clean energy.

Liddell is very old. In the year it was commissioned, I was minus 14 years old. Disneyworld opened, there were people hanging out on the moon, women couldn’t vote in Switzerland, Greenpeace would be founded, the first pocket calculator would be released and Australia pulled troops out of Vietnam.

It has lived a long, carbon intensive life. 2022 is when one of its four turbines, 500 megawatts, was meant to close down. The remaining 1,500 (three turbines) will reach their end of life in 2023. There are three possible futures for this power station, each advocated by different groups: 

  • Extend the life-span of this power station by three years, so it shuts down in 2026 (advocated by Australia’s pro-coal government)
  • Shut it down, and replace it with a mix of mostly clean energy and some gas-fired power (the plan of its owner, AGL)
  • Shut it down and replace it purely with a mix of clean energy and energy efficiency measures (as modelled by the University of Technology’s Institute for Sustainable Future (UTS ISF), on behalf of the Australian Conservation Foundation)

That 2017 UTS study models the costs of the three options, and the emissions footprint of all three options: 

[Chart 3 – UTS study costs and emissions)

The outcomes here are simple, and in line with what climate advocates have been saying for many years now: it is cheaper to act on climate than to kick the can down the road. “The Clean Energy Package is likely to be much cheaper and cleaner and no less reliable than either the Extend Liddell or AGL Proposal”, wrote UTS ISF in their 2017 report. 

There’s a simple significance here. It is safe to release a ‘technology roadmap’ while simultaneously working to put Australia’s aging coal fleet on life support. If there are no gaps for the new technology to fill, the fossil fuel industry will lurch on. AEMO’s five scenarios modelled in its ISP highlight the splintering trajectories of coal:

[Chart 4 – ISP Coal percentages]
The different futures for New South Wales, the NEM and all of Australia depend heavily on the shutdown of coal-fired power stations. Clean energy has already become the cheap powerhouse it needs to be, to be ready to fill in the gaps. But what if there are no gaps? 

History repeating

Stories like this will be intensely familiar to those who lived through the 2010s in climate and energy policy in Australia. The pattern is simple. A more expensive, less reliable and higher emissions is pushed despite all evidence to the contrary. The Renewable Energy Target was the victim of this in 2015, when its gigawatt hour value was cut. This was despite the government’s own commissioned review finding that cutting the scheme would lead to higher prices and higher emissions. 

And in the 2020s, the shutdown of coal-fired power stations will see the same attacks, where blatantly irrational decisions are made with the specific aim of protecting the revenue stream of Australia’s most emissions intensive assets. 

This is where the coal game is being played. Liddell is round one, and AGL is already buckling under pressure. The intensity of the game will only increase as we get further into the decade, as the coal industry’s accelerating global demise puts pressure on Australia’s coal-fired power stations. If anything, the King Review and the Technology Roadmap will both serve purely to help this broader project of coal delay, where coal operators can claim they’re responsibly extending the lifespan of their machines through drawn out taxpayer funded CCS projects that either barely impact emissions or have no impact at all. 

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